Burning tallies – and what bankers have forgotten

I mentioned the burning down of Parliament in my earlier post on a federal Britain. Famously it took place to general approval of the rubbernecking public.  As Thomas Carlyle put it,  “A man sorry I did not anywhere see.” I doubt it would be different now – although JMW Turner’s painting would doubtless be replaced by gigabytes of uploaded mobile phone footage.

The cause of the destruction was traced to the large quantity of ‘tally sticks’ being burnt in new boilers in the House of Lords. This caused a chimney fire and a subsequent ‘flashover’.

Although I’ve heard of tally sticks, I thought a quick bit of follow up research would do no harm – just to check. As ever this turned out to be a little less than ‘quick’.

I had originally thought tally sticks were credit money (rather than debt money) but they were in fact both. I hope I can safely say that they were, in England, originally issued as an indication of crown debt – so as a credit for future taxes to be paid. So when the King wanted lambs to be delivered to Westminster he would issue a tally to the supplier who would in turn accept it, since it would be acceptable for future payment of tax. On the same basis, the King’s wardrobe, too, used to issue a lot of tallies.

In due course the system became more complex and tax collection was farmed out to sherriffs who collected taxes in their local area, which they in turn remitted to the crown. The system was enforced and accounted for by tally sticks.

Additionally, from about the twelfth century (if not before), tallies were always split in two so perfectly indicating that one man’s debit is another man’s credit. That, to me, is twelfth century sophistication! The stick itself was usually made from hazelwood and was cut across its entire surface to indicate the scale of the debit/credit. It was then split – with the grain and the actual split itself ensuring that only that particular split married up with its unique companion. One portion was always made the largest – this was the stock, and its companion for the debtor, was smaller – the foil. The patterns of notches could be quite complex and spaces indicated amounts, which was vitally important when many people were not literate.

Many tally sticks thus became a sort of tradeable bond – or money –  with an inbuilt statement of account. See the picture below (from an auction – hence the arabic numerals).

These appear to show only the stock – the bigger portion. So perhaps this alternative modern reproduction and the cosmetically perfect example in this article (here) may give a better idea of the system.

In a world without small change tally sticks would also have been used for many small transactions. For much of the Mediaeval period in England the silver penny was the smallest coin in common circulation, and that was probably a whole day’s wage for a labourer. So, buying bread might have involved giving a penny to a baker and getting a tally. For wealthier people a tally stick for a large amount would be a lot easier to transport than the same amount of coinage, of course. And if it were stolen the chances of it being redeemed would depend on finding the companion stock or foil – so probably any theft was an inside job.

By the thirteenth century it seems that the financial market for tallies was sufficiently sophisticated that they could be bought, sold, or discounted, although you would obviously need to transact with a trusted source or with a trusted tally.

Interestingly, their most enduring legacy is probably in our vocabulary:

  • Tally “stick” coincides with the origin of “stock,” (from Middle English).
  • If some unsuspecting person was naive enough to accept an unmatched/unverified tally, they could find themselves “foiled.”
  • When split to create the receipt, the thicker piece of a tally stick was, as we’ve seen, the “stock,” kept by the “stock holder”.
  • The debtor got the “short end of the stick” whilst the stockholder shouldn’t end up being “foiled”.
  • When you went to the tallies or “tallied up” it was usually with someone called a “broker” – hence ‘stockbroker’, who broke the stick to indicate settlement.

In fact, the tally stick system formed the basis of British commerce until the formation of the Bank of England at the end of the 17th century and even then the Bank of England ‘stock’ was ‘bought’ from the King at a substantial (it is alleged up to 40%) discount then sold back to him at interest.

So this was the nature of ‘honest’ banking from the start.

And tally sticks were also known as ‘Nick Sticks’ and this may well be the origin of being ‘nicked’.

What a pity that the bankers have forgotten!